Electricity Reforms in
Bangladesh
Taifur Rahman
Introduction
Goals 2020:

Providing access to affordable and reliable electricity
to all citizens
A long way to go


Electricity coverage – 43%
Per capita electricity consumption – 165 kWh

One of the lowest in the world.
Pace of power sector development to be
accelerated.
Reforms Overview
Reforms starting in 1977

Rural Electrification Board (REB) created



70 large cooperatives (PBSs) established
Electricity Supplied to 7 million consumers out of
country’s 9.7 million consumers in 2006.
Significant positive impact on poverty reduction and
social benefits to the rural people
Unbundling starting in early 1991


Creation of Dhaka Electricity Supply Authority
(DESA)
Didn’t perform well.
Reforms Overview (cont.)
High power Inter-ministerial Committee on
“Power Sector Reform in Bangladesh” (PSRB)
constituted in 1993 recommending



Unbundling of the sector according to functional
lines
Corporatization of sector entities
Establishment of an independent Regulatory
Commission.
Reforms Overview (cont.)
Power Cell created under the Energy Ministry
in 1995

To drive power sector reforms and to promote
private power development
Two companies created in 1996


Power Grid Company of Bangladesh Limited
(PGCB)
Dhaka Electric Supply Company Limited (DESCO).
Reforms Overview (cont.)
The National Energy Policy adopted in 1996



Sector unbundling
Private sector participation
Establishment of an Energy Regulatory
Commission
“Private Sector Power Generation Policy of
Bangladesh” was adopted in 1996
“Policy Guidelines for Small Power Plants
(SPP) in Private Sector” approved in 1998.
Reforms Overview (cont.)
Vision Statement and Policy Statement on
Power Sector Reforms in June 2000
Corporatization of Ashugonj Power Station in
2002
Energy Regulatory Commission Act 2003
Creation of West Zone Power Distribution
Company (WZPDC) in 2003
Establishment of Electricity Generation
Company of Bangladesh (EGCB) in 2003.
Reforms Overview (cont.)
Bangladesh Energy Regulatory Commission
(BERC) starting in 2004
Approval to convert BPDB into a Holding
Company in January 2004
New company “Dhaka Power Distribution
Company Limited (DPDC)” incorporated in
2006
Policy guideline for power purchase from
Captive Power Plants (CPPs) prepared in
2006.
Current Structure
Ministry of Energy and Mineral Resources
Energy and
Mineral
Resources
Division
CEI
Power Division
BERC
Power
Cell
BPDB
IPP
PGCB
REB
IPP
DESA
DESCO
Power Sector Scenario
Total generation capacity (June 2007):

Total – 5,269 MW



BPDB (government) – 3,872 MW
IPPs (private) – 1,397 MW
Modes:





Hydro - 230 MW
Steam - 2688 MW
Gas Turbine - 1099 MW
Combined Cycle - 990 MW
Diesel - 238 MW
Per capita generation – 165 kWh.
Power Sector Scenario (cont.)
Development Plan: Installed Capacity
New addition
Capacity (MW)
20,000
17,765
15,000
9,666
10,000
5,000
4,710
6,441
14,525
0
1
2004
2
2007
3
2012
Year
4
2020
Power Sector Scenario (cont.)
Consumer base:

Total consumers – 10.42 million










Domestic - 8.50 %
Industrial (small) - 1.74%
Commercial (small) - 2.15%
Large Industrial and Commercial - 5.89%
Agriculture - 0.38%
Others - 1.27%
DESA - 25.36%
REB - 38.48%
DESCO - 9.69%
WZPDCL - 6.55%.
Power Sector Scenario (cont.)
Trends in Electrification
Electrified
households (%)
100
80
60
40
20
0
1976
1982
1991
2000
2007
2020
3
5.1
15.1
31
43
100
Year
Target
Regulation of Power Sector
Bangladesh Energy Regulatory Commission
(BERC)

Act passed in 2003



Establishment of as independent and impartial regulatory
commission to regulate energy sector.
Started functioning in April 2004
Objectives:


To frame rules and regulation to ensure transparency in
the management, operation and tariff determination in
electricity, gas and petroleum sector.
To protect consumer and industry interest and promote
competitive market.
Regulation of Power Sector
(cont.)
Major functions of BERC:





Issue, cancel, amend and determine conditions of
licensees
Determine tariff safety enhancement
Frame codes and standards and make enforcement
of those to ensuring quality of service
Resolve dispute between licensees and and
consumer and refer those to arbitration if necessary.
Advise the Government regarding electricity
generation, transmission, marketing, supply
distribution and storage of energy.
Regulation of Power Sector
(cont.)
Autonomy and accountability of BERC


Has been questionable so far
Lot of expectation from the new leadership
Public participation

Public hearing


Effectiveness questioned
Expected to be more effective under new leadership
No major regulatory decision so far.
Conclusion
New 3-year Road Map for Power Sector
Reform (2007-2009) announced last year


To create an institutional foundation on which to
ramp, in a sustainable manner, the substantial
investments needed for the sector to properly
support economic growth and reduce poverty.
Main outcome expected:

Further unbundling of electricity supply into an
economically viable number of separate generation and
distribution companies, and a single transmission
company
Good luck for the Road Map.